My Hoa Is Owned By The Developer Of Our New Neighborhood, And They've Become Extremely Predatory. As Well, The Bylaws And Ccrs Make It Nearly Impossible To Overturn Them. Advice On How To Proceed? [ar, Usa]
Hi there,
My wife and I recently purchased a new home in an HOA, knowing it was in one, and with the plan to dismantle it as soon as we moved in and control is relinquished to members. The development is brand new, so the HOA is directed by members elected by the developer. The developer states they will turn over control once all properties are sold.
However, recently they've become extremely predatory, with policies that are borderline illegal, and I'm actively dealing with them breaking the law. Recently they increased our dues by 25%, the maximum amount specified in the bylaws that doesn't require a vote by members, all the while their budget expenditure went down (But they list a much higher "reserve", so that's where it's going, I guess). They had their 2023 budget which showed landscaping as $19k but this year their 2025 budget shows it as $15k, with nothing else increasing or being added, so in theory it should've gone down. These budgets are really bad, there's a total of only 5 line items on it (Since our HOA literally provides nothing. No common areas, no pool, no parks or trails, literally nothing except to mow the retaining pond we have a couple times a year).
I've asked them to provide their finances that show the need for an increase in dues according to my rights within Ark. Code § 18-13-110(b), which requires them to provide me with their financial documents and for them to provide "convenient hours on working days" and have them "set and announced for general knowledge". However, they've ghosted me for a total of 5 days, (4 of them business days), and at the same time I can log onto the portal and see that the budgets they had were replaced with a single screenshot of basically nothing except a few numbers. So, I know they've seen my request, reacted by removing documentation, and are still ghosting me.
I started digging into the CCRs and Bylaws to see how we can overturn the board, and long story short we can't without court intervention, unless there is some Arkansas law that makes it possible. The initial directors are set via our developer, they are exempt from the term limits set, they cannot be voted out, and if we vote to amend or terminate any convenants, if it "conflicts" with what the initial board wants, they can just veto it. The board is not required to contain members from our neighborhood, and the developer is not required to relinquish control until they either choose to, or they sell 100% of all lots, meaning they can just keep a single lot and retain unwavering control.
I'm wondering what recourse we have. I was doing research and came across "Unconscionability", "Violation of Public Policy", and "Violation of Fiduciary Duty", but I'm not sure if these apply here, and if so, how do we go about even starting a suit? Obviously the lawyer would be in charge of handling this, but is there anything else we can do as a neighborhood? Thank you
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